Uber Betting on Tourism to Give It an Edge in Chinese Markets

Paul Carsten, Reuters

- Jan 11, 2016 2:35 pm

Skift Take

Uber has far to go in China and can use as much local insight and investment as possible.

— Jason Clampet

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Uber Technologies Inc said on Monday its China unit will get an undisclosed amount of investment from Chinese firm HNA Group as part of a partnership of the U.S. ride-hailing firm with the aviation and shipping conglomerate.

The partnership, which marks Uber’s ambitions to break into China’s huge tourism industry, includes an array of transportation services to and from airports and for HNA flights, as well as online financing for the automotive sector.

Uber CEO Travis Kalanick said in Beijing he envisions a system where customers can seamlessly move from traveling within a city to between and outside cities, built on a global series of partnerships.

Uber’s partnership with HNA Group comes as it and rival Didi Kuaidi vie to forge ties with influential Chinese companies with long-established ties to government as they try to avoid aggravating regulators in China’s still developing ride-hailing business.

Ride hailing in China, like in other countries, can either be technically illegal or operate in a gray area, depending on the location and kind of service. Uber’s battle with Didi Kuaidi has proven especially costly. Both companies have spent hundreds of millions of dollars in a bid to attract and keep users. Now, the rivalry is looking to extend further as Uber lures tourists and inter-city travelers.

At a press conference on Monday, Kalanick and HNA President Tan Xiangdong said they see the partnership as symbiotic, plugging each other’s gaps in travel.

To date, Uber has committed to invest 6.3 billion yuan ($958.61 million) in China, with the country Uber’s “largest market globally and a key strategic hub”, Kalanick said.

The U.S. ride-hailing firm’s China unit recently closed a funding round, before which it had a valuation of $7 billion. Investors from China were more than he could name, Kalanick said, declining to disclose further details about the latest fundraising.

In response to a question about Uber’s high cash-burn rate in China, Kalanick said the company is investing profits from cities around the world into China.